Trump's ambassador predicts Canada trade deal — with a catch

There's some good news, and some bad news, for Canada from U.S. President Donald Trump's ambassador to Ottawa.

First, the good news: He suggests a new Canada-U.S. agreement is achievable in the not-too-distant future, and it would benefit both countries.

The bad news? Don't count on tariff-free trade again.

Pete Hoekstra made the remarks Wednesday at a conference in his home state of Michigan, where he also bemoaned what he described as recent anti-Americanism in Canada.

"The president and the prime minister would like to get to a resolution sooner rather than later," Hoekstra said during a panel at the Mackinac Policy Conference.

"We will get through this." 

He predicted a stronger Canada-U.S. relationship in the end. 

As a specific example, he mentioned the auto sector, declaring that Canada and the U.S. are not competitors — China is the competition, he said.

But there's a catch. Based on the ambassador's remarks, Canada should not assume tariffs will disappear entirely.

"The president has made it very clear: There will be tariffs for every country wanting to do business in the United States," Hoekstra said.

This actually leaves Canada in an advantageous position, Hoekstra said: Depending on how these negotiations go, Canada could have the best trade access to the U.S. of any country.

He said Trump has already dropped most tariffs on Canada. Indeed, Canada does not have an across-the-board 10 per cent levy Trump imposed on most countries.

But it does have a 25 per cent steel and aluminum tariff, like most of the world, as well a 25 per cent tariff on certain products not traded under the Canada-U.S.-Mexico pact.

Based on remarks from both countries, it sounds like Ottawa and Washington envision trade talks happening in two phases. They're now discussing a deal to resolve a limited set of grievances, then, in several months, plan to start working on an update to the broader Canada-U.S.-Mexico pact.